1. Technical Field
The invention relates generally to bill payment systems. More particularly, the invention relates to a Internet based bill payment system allowing a consumer to push payment to a payee, such as a merchant, from the consumer's credit card account, regardless of whether or not the payee accepts credit card payments.
2. Description of the Prior Art
Current online bill payment systems such as, for example, Wells Fargo's Bill Pay service, allow a customer to make a bill payment to a payee where the bill payment is funded from a designated demand deposit account (DDA) at the financial institution where the customer has an account. This is referred to herein as the bill pay method. Regarding credit card payments, it is known that a payee that accepts credit card payments is required to pay a charge to the payee's acquiring bank (acquirer) to settle payment received via an accepted credit card payment by way of a card association network and association's set of rules. This results in a portion of the charge paid by the payee to the acquirer being passed back to the customer's credit card issuing bank (issuer) with such payment to the issuer being known as interchange. This is referred to herein as the interchange method.
One current methodology for completing such type of bill payment transaction includes a consumer periodically transferring money to the consumer's DDA account via a variety of ways. For example, the consumer can transfer money using an online transfer to the DDA, the consumer can deposit a credit card access check to the DDA account, and the consumer can take a cash advance and then deposit such advance to the DDA. In each of these scenarios, the consumer is typically charged an advance fee and a higher advance rate APR, as opposed to a purchase rate. Also, the consumer needs to make sure that the amount transferred is at least equal to or in excess of the sum of all payments to be made. Such current process is unwieldy and likely to be expensive for the consumer.
Another example of a bill payment transaction is a PayPal-type transaction and has disadvantages. According to this solution, a middleman company is set up as a merchant to expedite payments from one party to another. For example, PayPal accepts funds from a payor and then sends an email to the payee letting the payee know that funds have been deposited at PayPal. In order to receive the funds the payee must either open an account with PayPal to receive an electronic payment or contact PayPal to alternatively have a check issued to them. Payees must also pay a fee to receive payments if the source of the funds is a credit card account. The payee must have an email address. PayPal, as a merchant, charges the payee and/or the payor a fee to cover such interchange costs.
An example of an online transfer function as a source of funds is one offered by Wells Fargo. Such function allows a Wells Fargo customer to transfer money online from the customer's Wells Fargo credit card account to that same customer's DDA account. The transfer is treated as a cash advance, which can be costly for the customer and if the funds are to be used to make payments from Well Fargo's Bill Pay system, the transfer needs to be in excess of the sum of all payments to be made.
It would be advantageous to allow an enterprise to offer enterprise online bill payment customers the option to choose an enterprise consumer credit card account, business credit card account, or other credit product as a source for funding to make a payment in addition to or separate from the option to use a DDA or other deposit account as a source of funds. It would be further advantageous to create an Internet based bill payment system which allows a consumer to use an advance methodology that pushes payments, which can be a combination of specific amounts for each payment, to payees whether or not the payee accepts credit card payments. It would be further advantageous for a consumer to make multiple small advances from the consumer's credit card account in an exact amount of each payment desired. It would be further advantageous to enable an enterprise to offer a bill payment advance methodology, i.e. funded by credit account, with a lower or no per-transaction fee and a rate lower than typical advance rate APR's. It would be further advantageous to charge only a purchase rate and a lower or no transaction fees. It would further be advantageous to allow for an interest rate grace period. It would be further advantageous to treat a transaction as an internal advance and not as a payment as if to a merchant. It would be further advantageous to provide a bill pay advance methodology where an issuing bank and an acquiring bank do not have to be the same bank or enterprise and where a card association network settles the issuer and acquirer accounts including requiring interchange fee payments to the issuing bank.